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Brexit brinkmanship: Johnson says prepare for no-deal and cancels trade talks

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UK Prime Minister Boris Johnson said on Friday (16 October) it was now time to prepare for a no-trade deal Brexit unless the European Union fundamentally changed course, bluntly telling Brussels that there was no point in continuing the negotiations, write and

A tumultuous “no deal” finale to the United Kingdom’s five-year Brexit crisis would sow chaos through the delicate supply chains that stretch across Britain, the EU and beyond - just as the economic hit from the coronavirus pandemic worsens.

At what was supposed to be the 'Brexit summit' on Thursday (15 October), the EU delivered an ultimatum: it said it was concerned by a lack of progress and called on London to yield on key sticking points or see a rupture of ties with the bloc from Jan. 1.

“I have concluded that we should get ready for 1 January with arrangements that are more like Australia’s based on simple principles of global free trade,” Johnson said.

“With high hearts and with complete confidence, we will prepare to embrace the alternative and we will prosper mightily as an independent free trading nation, controlling and setting our own laws,” he added.

EU heads of government, concluding a summit in Brussels on Friday, rushed to say that they wanted a trade deal and that talks would continue, though not at any price.

German Chancellor Angela Merkel, Europe’s most powerful leader, said it would be best to get a deal and that compromises on both sides would be needed. French President Emmanuel Macron said Britain needed a Brexit deal more than the 27-nation EU.

Johnson’s spokesman said talks were now over and there was no point in the EU’s chief negotiator Michel Barnier coming to London next week barring a change in approach.

However, Barnier and his British counterpart David Frost had agreed to speak again early next week, Downing Street said.

The pound oscillated to Brexit news, dropping a cent against the US dollar on Johnson’s remarks but then rising before falling again on his spokesman’s comments.

After demanding that London make further concessions for a deal, EU diplomats and officials cast Johnson’s move as little more than rhetoric, portraying it as a frantic bid to secure concessions before a last-minute deal was done.

Dutch Prime Minister Mark Rutte said he thought Johnson had signalled that London was ready to compromise.

While US investment banks agree that a deal is the most likely ultimate outcome, the consensus was wrong on the 2016 Brexit referendum: when Britons voted by 52-48% to leave, markets tumbled and European leaders were shocked.

Asked if he was walking away from talks, Johnson said: “If there’s a fundamental change of approach, of course we are always willing to listen, but it didn’t seem particularly encouraging from the summit in Brussels.

“Unless there is a fundamental change of approach, we’re going to go for the Australia solution. And we should do it with great confidence,” he said.

A so-called “Australia deal” means that the United Kingdom would trade on World Trade Organization terms: as a country without an EU trade agreement, like Australia, tariffs would be imposed under WTO rules, likely causing significant price rises.

European Commission President Ursula von der Leyen said she was keen for a deal, though Macron was more downbeat.

“The state of our talks is not that we are stumbling over the issue of fishing, which is the British’s tactical argument, but we’re stumbling over everything. Everything,” Macron said.

“The remaining 27 leaders of the EU, who chose to remain in the EU, are not there simply to make the British prime minister happy,” he added.

Merkel called for Britain to compromise. “This of course means that we, too, will need to make compromises,” she said.

Britain formally left the EU on 31 January, but the two sides have been haggling over a deal that would govern trade in everything from car parts to medicines when informal membership known as the transition period ends 31 December.

Johnson had repeatedly asserted that his preference is for a deal but that Britain could make a success of a no-deal scenario, which would throw $900 billion in annual bilateral trade into uncertainty and could snarl the border, turning the southeastern county of Kent into a vast truck park.

The EU’s 27 members, whose combined $18.4 trillion economy dwarfs the United Kingdom’s $3trn economy, says progress had been made over recent months though compromise is needed.

Main sticking points remain fishing and the so-called level playing field - rules aimed at stopping a country gaining a competitive advantage over a trade partner.

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Irish PM hopeful of Brexit trade deal outline by end of week

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Irish Prime Minister Micheal Martin said on Monday (23 November) that he hoped that the outline of a Brexit free trade deal will have emerged by the end of the week and urged unprepared smaller Irish exporters to get ready for change, whether there is a deal or no deal. The European Union’s Brexit negotiator said on Monday that big differences persisted but that both sides were pushing hard for a deal, as talks resumed, writes Padraic Halpin.

Moves will have to be made on some of the key issues such as fisheries and the so-called “level playing field”, Martin said. But he added that he had got a sense of progress from both negotiating teams, and that a presentation last week from EU Commission President Ursula von der Leyen was probably one of the more hopeful to date.

“I would be hopeful that, by the end of this week, that we could see the outlines of a deal, but that remains to be seen. It is down to political will, both in the United Kingdom and I’m clear the political will is there from the European Union,” Martin told reporters.

On a visit to Dublin port, Ireland’s largest freight and passenger port, Martin said that, while 94% of Irish importers from the UK and 97% of exporters had completed the necessary customs paperwork to continue trading with Britain, he was worried by the take-up among some small and medium-sized firms.

“The one concern I’d have is maybe there is a complacency among some SMEs out there that everything will be OK and ‘Sure if they get a deal, won’t it be OK?’. It will be different, and you have to get that into your heads,” Martin said. “The world will change and it will not be as seamless as it once was. The bottom line is you need to get ready. It is not too late, people just need to knuckle down now.”

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Johnson and EU's von der Leyen may speak this week, Times Radio reports

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British Prime Minister Boris Johnson and the European Commission’s Ursula von der Leyen (pictured) are likely to speak later in the week as the Brexit talks get to a crunch point, the chief political commentator of Britain’s Times Radio said, writes Kate Holton.

Tom Newton Dunn said officials on both sides were setting up a phone call, or possibly even a face-to-face meeting, in what could be a pivotal moment for the free trade talks.

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EU's Barnier says 'fundamental divergences' persist in UK trade talks

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The European Union’s Brexit negotiator said on Monday that big differences persisted in trade talks with Britain but that both sides were pushing hard for a deal, writes Gabriela Baczynska.

“Time is short. Fundamental divergences still remain, but we are continuing to work hard for a deal,” said the EU negotiator, Michel Barnier (pictured). Trade negotiators resumed talks on the shape of the new EU-UK relationship after a post-Brexit standstill agreement expires on Dec. 31. As in the last few weeks, the focus was still squarely on dividing up fishing quotas and ensuring fair competition for companies, including on regulating state aid.

Face-to-face talks, suspended last week after a member of the EU delegation tested positive for the new coronavirus, will resume in London “when it is safe to do so”, said a source who follows Brexit, speaking on condition of anonymity. Another source, an EU official, added: “The differences on the level playing field and fisheries remain major.” The British The Sun newspaper reported at the weekend that the negotiators were looking at a clause that would allow a renegotiation of any new fishing arrangement in several years’ time.

An EU diplomat, a third source who spoke under condition of anonymity, confirmed that such an idea was under discussion, but added that the bloc insisted on linking it to the overall trade agreement, meaning that fishing rights could only be renegotiated together with the rest of trade rules. “We need to uphold the link between fishing and trade rules, this comes in a package,” the source said. The EU official said annual renegotiation of fishing quotas was a ‘no-go’ for the 27-nation bloc. Fisheries are a particularly sensitive issue for France.

Thierry Breton, the French representative on the European Commission, the EU executive, said last week: “We shouldn’t have in the Brexit deal revision clauses in one or two years, when everything would change again. We won’t let that happen. We need to give our entrepreneurs predictability.”

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